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Entertainment Rights cuts jobs
08.12.08 | Philip Jones
Entertainment Rights has admitted that it could lose as much as £500,000 due to the loss of business resulting from the administration of Woolworth's subsidiary Entertainment UK. The figure was revealed as the company announced plans to cut its workforce by a third as well as the appointment of a new chief executive and short-term loan facilities.
The character licensing business has promoted the president and c.e.o. of its US division Deborah Dugan to the post of chief executive in place of Nick Phillips, who left last week. It added that it had agreed, with its bank HBOS, additional short term facilities of £13m to cover potential cash flow shortfalls during the period to 28th February 2009. Entertainment Rights said that it continued to work closely with its bank towards securing new, longer term, funding arrangements to support the group past 28th February 2009.
The group also revealed that it planned to cut its workforce by a third by the end of the year, from 150 to 100 employees, with the intention of saving it £5m a year. It described the plan as one of the "mitigating actions" put in place to cope with the harsh economic climate. A statement read: "It remains too early to ascertain the likely pattern of Christmas trading, although initial indications are that shipments of goods into the retail trade will be later than anticipated and that sales will be lower than expected."
It estimated that EUK owed it £800,000, but the figure would be mitigated by savings in royalty payments to rights owners of £300,000 leaving a net exposure of about £500,000. It added that it was "actively assisting other retailers who wish to replace the business which would otherwise be lost" and was "actively seeking clarification as to the recoverability of this sum" from EUK.
Rod Bransgrove, chairman, said: "Our strengthened financial position, streamlined organisation and new management are all vital steps forward in restructuring the company. Deborah Dugan is a highly distinguished chief executive whose industry knowledge and contacts will prove extremely effective in taking the company forward."